Singapore-based derivatives exchange Asia Pacific Exchange (APEX) on Thursday (23 May) held its Fuel Oil Futures Cocktail Reception at the JW Marriot South Beach hotel; the event was attended by more than 500 guests.
APEX launched its Fuel Oil Futures Contract (FO Contract) on 11 April, 2019. The Monetary Authority of Singapore (MAS) regulated exchange is Singapore’s third derivatives exchange.
To date, the APEX FO Contract is trading approximately 35,000 lots (350,000 mt) per day with open interest of close to 3,000 lots (30,000 mt) since launch.
Eugene Zhu, CEO of APEX, also the founder of China Financial Futures Exchange (CFFEX) and Dalian Commodity Exchange (DCE), believes APEX will help Singapore establish itself as a leading commodity and financial derivatives trading centre.
“APEX Fuel Oil Futures Contract is our first foray into the energy industry and our foremost product which we will spend the most time and effort in making it a success,” he said in a keynote speech.
“Our FO contract is designed with few exclusive features to differentiate itself and fill in the gap for the current market. Firstly, it provides continuous trading and price transparency in the market, with trading hours (10 hours) covering various exchanges and paper market. This is ideal for arbitrageur and speculator to trade when opportunities arise.
“The contract is denominated in 10MT/contract, priced in USD, to enable all types of investors (big and small) to participate with lesser capital outlay. We believe with smaller contract size it allows us to reach out to broader clientele to capture sufficient liquidity.
“Lastly, it adopts the physical delivery settlement mechanism, which is aligned with the trading practices in the spot market while utilising APEX Fuel Oil Warehouse Receipt (AFOWR) to establish a standardized Warehouse System.”
Lim Hwee Hua, Chairman of APEX, the former Minister in the Office of the Prime Minister of Singapore and Second Minister for Finance and Transport, was pleased with the development.
The APEX Fuel Oil Futures Contract will help market participants form a new pricing benchmark for fuel oil trades and play an active role in providing market price discovery and arbitraging opportunities, she says.
“This will reinforce Singapore's leading position for price discovery of oil in Asia, and the world’s largest trading port for bunker fuel oil,” stated Lim.
“Henry Ford once said: ‘Coming together is a beginning, staying together is progress, and working together is success.’
“In the same spirit, we look forward to many more years of successful partnership with every one of you. Thank you once again for your support and I wish you all good health and a good evening ahead.”
Photo credit: Asia Pacific Exchange
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